Markets paused their slide this week, supported by the technology sector after an artificial intelligence sell-off driven by higher borrowing costs and doubts about data-center returns. Last Friday, the S&P 500 fell 1.1%, while the Cboe Volatility Index rose from below 16 to above 22 in two hours; thin trading, including the lowest full-day volume for the SPY since 2003 on October 12, increases the risk of sharp price gaps. Starting Friday, Moody’s could downgrade France’s sovereign debt from Aa3, while the 159-basis-point gap between French and German yields, the riots and proposals to cancel part of the national debt are adding to concerns about France’s fiscal position. Anthropic’s IPO roadshow, earnings from roughly half of the S&P 500 between October 28 and November 3, a possible Iranian military escalation targeting energy prices and the Federal Reserve meeting on October 28 are the other major risks for the week.
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